Abstract

Footnotes (72)

Using the URL or DOI link below will
ensure access to this page indefinitely

Based on your IP address, your paper is being delivered by:

New York, USA

Processing request.

Illinois, USA

Processing request.

Brussels, Belgium

Processing request.

Seoul, Korea

Processing request.

California, USA

Processing request.

If you have any problems downloading this paper,please click on another Download Location above, or view our FAQFile name: SSRN-id1917349. ; Size: 113K

You will receive a perfect bound, 8.5 x 11 inch, black and white printed copy of this PDF document with a glossy color cover. Currently shipping to U.S. addresses only. Your order will ship within 3 business days. For more details, view our FAQ.

Quantity:Total Price = $9.99 plus shipping (U.S. Only)

If you have any problems with this purchase, please contact us for assistance by email: Support@SSRN.com or by phone: 877-SSRNHelp (877 777 6435) in the United States, or +1 585 442 8170 outside of the United States. We are open Monday through Friday between the hours of 8:30AM and 6:00PM, United States Eastern.

Recent developments in German VAT compliance, notably (a) the imposition of criminal penalties for failing to immediately amend a preliminary return that is known to be in error [Bundesgerichtshof decision of March 17, 2009, No. BGH 1 StR 342/08], when considered in tandem with (b) amendments to the voluntary disclosure rules, Gesetz zur Vebesserung der Bekämpfung von Geldwäsche und Steuerhinterziehung, it is clear that the German VAT compliance landscape has changed dramatically in the past year.

Taken as a whole, the German rules strongly encourage internal audits, self-reviews, and immediate self-disclosures of errors in previously filed returns and taxes paid.

This paper compares two similar compliance regimes in two similar consumption taxes – preliminary VAT returns in Germany and estimated retail sales tax returns in the US States. Both regimes have the same concern – the tax administration wants to encourage taxpayers to make timely and accurate estimated payments of a tax that is not yet fully due.

It is clear that German enforcement is far more stringent than the American. For a tax manager steeped in the retail sales tax, the German approach is difficult to fathom and its development nearly impossible to anticipate – and herein lies the pitfall for American tax managers.

German/American differences in the approach to filing and payment errors have an effect on how taxpayers interact with tax authorities. Where the German system fosters a “correction required, if necessary” attitude, the American system fosters a “catch me, if you can” attitude. The “tax intuition” of an American tax manager to the discovery of an unintended error is to wait for the tax authorities to assess applicable penalties and interest. The German expectation is that the tax manager will immediately make needed corrections and notify the tax authorities of the errors, and if he does not then criminal penalties can be applied.

The German approach to compliance is making automated third-party compliance approaches, like those of the certified service provider (CSP) under the Streamlined Sales and Use Tax Agreement (SSUTA), a very attractive option.